Traci owns and operates Mirror Computers. Mirror is a company that builds computers suited to the individual customer’s needs, such that that the computer’s performance mirrors the customer’s needs. Mirror has entered into a contract with Analytics Corp, to build 100 computers. Based upon her contract with analytics, Traci will make a net profit of $1000 per compute. Analytics requires that the computers be equipped to perform complex analytic formulas without delay or drag time. Mirror contacts ComputersUSA, and advises the sales representative of the requirements for the processor in the computers that she is building for Analytics. ComputersUSA advised her that a 5.0 GHZ Intel processing chip would satisfy the needs of Analytics. Traci advises the ComputersUSA sales rep that she is under a contractual deadline with Analytics and therefore she must have 100 of the 5.0 GHZ Intel processing chips no later than July 1 in order to finish building the computers in time to satisfy her contractual obligations to Analytics. The sales rep agrees to the terms.
EACH QUESTION THAT FOLLOWS IS BASED ON A DIFFERENT SCENARIO. PLEASE READ CAREFULLY AND ANSWER EACH QUESTION BASED ON THE SCENARIO THAT APPLIES TO THE QUESTION.
SCENARIO #1-
On June 25th, Traci received 100 processing chips from ComputersUSA, but they were 3.5 GHz Intel processing chips.
QUESTION #1– What are all of Traci’s options, under the UCC, with regards to the ComputersUSA shipment on June 25th. Identify the options by reference to UCC terminology. (15 pts).
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SCENARIO #2 – For this second scenario, disregard scenario #1. Instead, assume that Traci received 100 processing chips from ComputersUSA and that they were 5.0 GHz Intel processing chips. Also assume that the contract contains a valid disclaimer of all express warranties. Traci put the chips into the computers that she built for Analytics. She delivered the computers to Analytics. Analytics contacted Traci and advised her that the computer processing chip was not powerful enough to handle the complex analytic formulas and that there was significant delay and drag time in processing, and therefore Analytics was returning the computers and not going to pay Traci for the computers.
QUESTION #2– Identify and explain the UCC provision of the Uniform Commercial Code that would support Traci’s claim for lost profits against ComputersUSA. (10 pts). State whether Traci should win the lawsuit based upon the UCC provision that you have identified. (5 pts).
